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Saturday, November 20, 2010

SBA Webinar - SBA Loans Offer More Middle Market Lending Capability

bank_5000-1182.pdf (application/pdf Object) Is your bank prepared to make $5 million small business loans? The historic Small Business Lending Act, signed into law in October, more than doubles the loan size that qualifies for the Small Business Administration (SBA) loan guaranty programs. Specifically, the landmark legislation increases the SBA 7(a) and 504 limits from $2 million to $5 million (and for manufacturers and certain energy-related projects seeking 504 loans, to $5.5 million). This huge increase in loan size creates an unprecedented opportunity for small business lenders to grow their business.

The size of the loan isn't the only thing that changes for lenders. The customer will change too. Certainly the prospects of increasing their borrowing will appeal to some existing customers. In addition, the $5 million loan size and SBA guaranty provision will also attract new applicants from larger companies and unfamiliar industries. Some of these new customers will have management teams with greater financial sophistication and a different approach to business relationships than the Main Street customer that is the traditional mainstay of small business lenders. Instead of business owners, you will be dealing with Chief Financial Officers. They will be comparing the terms you offer to those of conventional loans offered by larger banks and may expect you to negotiate accordingly.

Bigger loans also means bigger risks. Converting the $5 million loan opportunities into profitable business requires lenders to adapt a fundamentally different approach to underwriting and risk assessment. Managing loans that are over twice the size of past loans means marketing, sales, back office, and servicing all need to be adjusted. Making $5 million loans is more than a new product launch -- lenders are truly entering a new business arena.

This Coleman Webinar will identify the management mindset that must be adopted, issues you must address, plus the skills and infrastructure that must be developed to capitalize on this new $5 million opportunity. Three national experts on SBA loans and small business lending will address these questions:

* Prospects: What industries and types of companies will now fit into the much larger credit box?
* Marketing: How do I reach these new potential customers?
* Underwriting: How do how I learn the industry outlook and the strength of an applicant's competitive position?
* Do I need to move beyond a local industry assessment to a regional or even national assessment?
* Compensation: How does compensation for sales and management need to be adjusted when the loan size more than doubles?
* Processing: Has my SBA submission software been updated to incorporate the larger loan sizes? Do larger loans require additional documentation for the SBA?
* Servicing: How is it different for a $5 million loan?

In addition, these experts will answer your questions. You can pose your own question by asking it directly during the webinar. Alternatively, you can submit your question via email to Bob Coleman, the webinar moderator, and he will ask the question without identifying its source.

Christopher G. Hurn, Chief Executive Officer/Cofounder,
Mercantile Capital Corporation, Orlando, FL
Mercantile Capital Corporation (MCC) reports that it is "the only company nationwide that exclusively focuses on providing SBA 504 loans for business owners to finance commercial property". Chris leads MCC's business development, underwriting and marketing functions. Previously, he worked as a senior management consultant, financier and executive with GE Capital, Heller Financial and NAI Realvest.

Annmarie E. Murphy, Sr. Loan Officer / Owner,
Live Oak Bank, Colorado Springs, CO
Based on SBA 7(a) loan volume, Live Oak Bank ranks #3 nationally with gross 7(a) loan volume over $375 million for FY 2010 (ending September 30). Opened in 2008, Live Oak operates as a commercial bank focusing on SBA loans. Annemarie specializes in dental and veterinary financing with a concentration in expansion and construction loans. During her career, she has successfully closed over $225 million in healthcare loans. In 2005, Annemarie was named the SBA Financial Services Champion of the Year. Before joining Live Oak Bank, she served as Vice President, Healthcare Finance Division, United Western Bank; Regional Account Manager for CIT; and as an Assistant Vice President for Bank of America.